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You have ground the heads off the axle bolts and just the stud is left going through the axle, so lower the diff, the studs that are left will slide out the other axle, leaving a 2 inch or so stud that's threaded into the diff ear. Use vise grips to turn out what you have led of the diff bolt on the diff ear.

wedge a screw driver between the axle and diff plate and pry it away; as mentioned it should just drop or slide away. you're making it far more difficult then it is. :-) once the studs are exposed use some heat and twist out with Vise grips as mentioned.

note: you may have to ground the head flush - from the pic it doesn't look like it has been ground enough

Ive dropped the rear subframe completely and the diff is out of it. But I now have 2 problems here...

Theres one of the 2 remaining bolts in the rear axle that I ground the heads off. HOw the hell do I remove that? The plate on the axle behind the bolt which is circled in orange is blocking me from getting anything on it.

You can see the end of the bolt there circled but again, the plate / orange is protecting me from getting at it

AND even more broken bolts ...

5/6 header to exhaust nuts just snapped right off the bolt

So im left with 5 studs that need replacing - How do you get these out? I dont have power tools at my disposal. Hammer and a blow torch?

I should probably remove the O2 sensor up there on the header before I begin hammering away?